Maldives wooing Malaysian business

THE Maldives is renowned as a tourism haven for its sandy white beaches and palm trees, but that's not enough to spur the economy for this tiny nation of 300,000 people.

What the country needs is foreign investment, and its sights are set on Malaysia.

High Commissioner of the Maldives to Malaysia, Midath Hilmy, ranked attracting Malaysian trade and investments as one of his country’s top priorities.

»Ours may be a small economy, but I want Malaysian businessmen to know that we have a very open economy« MIDATH HILMY

“Sad to say, there is hardly any Malaysian investment in the Maldives. Ours may be a small economy, but I want Malaysian businessmen to know that we have a very open economy.

“I want to see substantial trade flow established between our countries. Malaysia is now our fourth largest source of imports. Our view is that Malaysia can offer a lot more to the Maldives,’’ he told StarBiz.

Hilmy, a former Communication, Science and Technology Minister who was posted here last year as his country's first resident High Commissioner, had much to say about why the Maldives was ideal for investors.

“First of all, there is no income, corporate or property tax. Foreign ownership is allowed right up to 100%, and there is unrestricted repatriation of profits and capital proceeds.

“There is also the freedom to use foreign managerial, technical and unskilled workers,'' he explained.

Other advantages include a legally-backed investment guarantee, overseas arbitration of disputes, long-term contractual obligations and land-lease for large-scale projects, plus no foreign exchange restrictions.

Hilmy unveiled the “package” of business opportunities available in the Maldives. Projects are needed in hotel and properties, food and beverage, banking and finance, insurance, information technology, construction and infrastructure, fisheries, construction equipment and material supply, hospitality industry supply, venture capital and higher education.

“Educational facilities are lacking as we have only one private college offering diplomas and certain degree courses,'' he added.

Besides tourism (33%), the main industries there are transport and communications (15%), fisheries (6%), wholesale and retail trading (4%) and construction (4%). Other businesses make up 38% of the economy.

The Maldives, which consists of 1,190 coral islands spread over 90,000 sq km in the Indian Ocean, has been experiencing robust economic growth over the past three decades, with average growth of 7.5% over the past 10 years.

However, the 2004 tsunami caused extensive damage to its infrastructure and people’s livelihood, with the country's gross domestic product falling by two-thirds.

But Hilmy was pleased to say that things have been on the mend, with the medium-term forecast pointing to an economic rebound, resulting in an 8% to 9% growth over the 2006/07 period.

“The Maldives is a heavily import-oriented economy. Merchandise exports are relatively small as our economy is mainly service oriented.

“Frozen, fresh and processed fish accounts for the bulk of the merchandise exports,'' Hilmy added.

The telecommunications sector is also ripe for investments.

“When I was the minister in charge, I brought in additional companies to break the monopoly that existed. Since then, the Internet and mobile phone rates have fallen dramatically,'' he said.

On the tourism sector, the envoy said it had shown resilience despite the extensive damage caused by the tsunami.

On claims that the Maldives was too expensive for tourists, he said that although some room rates were high, there was still affordable accommodation to be found.

Source: The Star